Armenia Labor Regulations Update: Key Policy Changes in 2025

In 2025, Armenia has introduced a series of significant updates to its labor legislation, aimed at strengthening worker protections, improving workplace equity, and aligning national standards with international practices. These changes affect employers across sectors—especially foreign companies operating in or expanding into the Armenian market. This article outlines the latest developments, practical implementation steps, and critical considerations for compliance.

Major Updates in Armenia’s Labor Code (2025)

The revised Labor Code, effective January 1, 2025, introduces several transformative measures:

• Expanded Definition of Employment Relationships: The law now covers gig workers and remote freelancers under certain conditions, granting them access to social benefits and minimum wage protections.
• Mandatory Remote Work Agreements: Employers with over 20 staff must formalize remote work terms in writing, including data privacy, working hours, and equipment provision.
• Parental Leave Enhancement: Paid parental leave has been extended from 120 to 180 calendar days, with at least 60 days reserved for each parent (non-transferable).
• Anti-Discrimination Protections: New clauses prohibit discrimination based on gender identity, sexual orientation, and disability, with enforceable penalties.
• Overtime Compensation: Overtime must be compensated at no less than 1.5 times the regular hourly rate, capped at 4 hours per day and 18 hours per week.

New Minimum Wage and Indexation Mechanism

As of April 2025, Armenia’s statutory minimum wage increased to AMD 80,000 (approx. USD 205) per month. A new indexation rule ties future adjustments to inflation and GDP growth, ensuring automatic annual reviews unless exceptional economic conditions apply.

Workplace Health and Safety Amendments

Employers are now required to conduct biannual risk assessments and maintain digital safety logs. High-risk industries—including construction and manufacturing—must appoint certified occupational health officers by Q3 2025.

Step-by-Step Compliance Guide for Employers

1. Review Existing Contracts: Audit all employment agreements to ensure alignment with updated definitions of working time, remote arrangements, and anti-discrimination clauses.
2. Update Internal Policies: Revise HR handbooks to reflect new leave entitlements, overtime rules, and employee rights under the expanded scope.
3. Train Management Teams: Conduct mandatory training sessions for supervisors on recognizing discriminatory behavior and managing hybrid teams fairly.
4. Implement Payroll Adjustments: Recalculate wages to meet the new minimum threshold and ensure accurate tracking of overtime hours.
5. Register Gig Workers Where Applicable: If your business engages platform-based personnel regularly, assess eligibility for inclusion under the extended labor protections and register accordingly with the Ministry of Labor.
6. Submit Updated Reports: File revised workforce reports through the e-Government portal by June 30, 2025, disclosing remote workers, overtime usage, and safety compliance status.

Critical Considerations and Common Pitfalls

Non-compliance can result in fines ranging from AMD 100,000 to 5 million, depending on the violation's severity. Key risks include:

• Underestimating reporting obligations for hybrid work models.
• Failing to document consent for flexible scheduling.
• Misclassifying employees as independent contractors to avoid benefit provisions—a practice now subject to strict scrutiny.

A notable case involved a Yerevan-based tech startup that faced penalties after mislabeling 15 full-time developers as freelancers. Authorities ruled that control over work schedules and tools indicated an employment relationship, triggering back payments for social contributions and leave.

Support for International Employers

Foreign companies without a local legal entity may now use licensed Employer of Record (EOR) services to legally hire Armenian talent. These providers handle payroll, tax filings, and regulatory adherence, reducing entry barriers.

SailGlobal offers tailored out-of-sea human resource solutions, helping global firms navigate Armenia’s evolving labor landscape with compliant hiring, contract localization, and ongoing advisory support.

Conclusion

The 2025 labor reforms mark a pivotal shift toward inclusive and transparent employment standards in Armenia. Proactive adaptation is essential for both domestic and international employers. By updating policies, investing in training, and leveraging expert partners like SailGlobal, organizations can ensure smooth compliance and foster a more resilient workforce.